Amazon Marketplace vs. Amazon Product Ads Showdown

We can all think of lots of ways to describe Amazon. However, most of us don’t first think of Amazon as an advertising platform. Yet, Amazon sold $609 million in ads in 2012, and eMarketer predicts that it will eclipse $835 million in advertising sales in 2013. Those are big numbers. Amazon has been working for years on a program to turn what it knows about its customers into a contextual advertising product to monetize the traffic from visitors not ready to buy on Amazon.com. Even with the emergence of Google Product Listing Ads, more users start their ecommerce journeys at Amazon than at Google, so incorporating Amazon into your ecommerce strategy is now essential. Most merchants already know about the Amazon Marketplace where third-party sellers offer items on Amazon similar to any other online or offline wholesale marketplace. Many retailers participate because they are willing to pay some significant commission and give up some control to Amazon for access to its 80M visitors a month. But what many sellers still don’t understand is the way to make Amazon shoppers your customers without paying commissions or selling through Amazon: a little program known as Amazon Product Ads. For many of our retail & ecommerce clients, Amazon Product Ads have become an extension of Google’s Product Listing Ads or an addition to a comparison shopping initiative. Before we talk about recommendations, let’s first do a quick rundown of the two available programs

Key differences between Amazon Marketplace and Amazon Product Ads

Amazon Marketplace

As an Amazon Marketplace seller, you pay commission to Amazon for sales that are done on the Amazon site.

Amazon deducts a fee and puts the balance in your Amazon Marketplace account.

Some sellers also utilize Amazon’s fulfillment capabilities that are part of the marketplace

Amazon Marketplace buyers may not know that they’re buying from a third party because all these sales are done using Amazon’s shopping cart and processed just as if they were Amazon-direct purchases.

Listings from Amazon Marketplace Sellers appear on the right side of the product page, under More Buying Choices.

Even though Pro Marketplace sellers pay Amazon $39.95 monthly in exchange for a lower per-transaction cost, Amazon Marketplace is a pay-for-performance marketplace. Amazon earns a commission only when a visitor buys something from a Marketplace seller on the Amazon site.

Who It’s For: Wholesalers and manufacturers who want to expand their distribution and increase sales.

Amazon Product Ads

As a buyer of Amazon Product Ads, on the other hand, you are paying for contextually served ads on Amazon site pages that link back to product pages on your site.

Consumers know who they are buying from because the transaction occurs on your site and not at Amazon.com. This is a huge benefit to merchants who want to retain customer data for future sales opportunities.

You pay Amazon per click, based on your bids which are set at the product level, and not a direct commission on your sales.

Product ads appear on the lower part of product pages under the heading Product Ads from External Websites.

Who It’s For: Performance marketers looking to win back market share from Amazon and to have more control of their customer data.

Take a Fresh Look at Amazon’s Product Ads Program

Amazon has been stealing market share for the past decade, so you should be wary, but not so wary that you miss the opportunity to profit from Amazon Product Ads. If you are a retailer fighting to retain your market share from Amazon, you should take a new look at Amazon’s advertising platform. To put it simply, it’s another place to buy keyword-targeted CPC media with a highly engaged retail audience. Managing a successful Amazon Product Ads campaign takes expertise, but it has been an outstanding strategy for many of our clients who wish to tap Amazon’s traffic without giving Amazon so much control or paying so much in commissions. It’s not too late to get in the game before Q4! Now, go forth and test!

Dan Golden has been in the search business since 2001 and brings a wealth of digital marketing experience to Be Found Online. A graduate of Northwestern University with a B.A. in Economics, he has a diverse digital marketing background having spent time on the client side, freelance consulting, at large agencies and in start-up environments.
After learning the “how to’s” at ConsumerGuide, DoubleClick Performics & Google, he took the best part of each and founded Be Found Local as a paid search company in 2006. In 2009, he joined forces with long time business partner, SEO mastermind and fellow Northwestern University graduate Steve Krull to form Be Found Online. Executing a successful formula of doing right by their clients and by their employees, the company has since grown over 500% and was recently named the #4 Fastest Growing Chicago Ad Agency on the 2012 Inc 500|5,000 list.
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